Home FCA Handbook MCOB MCOB 12 MCOB 12.5 Excessive charges: regulated mortgage contracts, home reversion plans and regulated sale and rent back agreements
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MCOB 12.5 Excessive charges: regulated mortgage contracts, home reversion plans and regulated sale and rent back agreements

01/07/2009R

A firm must ensure that any regulated mortgage contract, home reversion plan or regulated sale and rent back agreement that it enters into does not impose, and cannot be used to impose, excessive charges upon a customer.

01/07/2009R

A firm must ensure that its charges to a customer in connection with the firm entering into, making a further advance or further release on, administering, arranging or advising on a regulated mortgage contract, home reversion plan or regulated sale and rent back agreement, or arranging or advising on a variation to the terms of a regulated mortgage contract, home reversion plan or regulated sale and rent back agreement are not excessive.

31/10/2004G

When determining whether a charge is excessive, a firm should consider:

  1. (1)

    the amount of its charges for the services or products in question compared with charges for similar products or services on the market;

  2. (2)

    the degree to which the charges are an abuse of the trust that the customer has placed in the firm; and

  3. (3)

    the nature and extent of the disclosure of the charges to the customer.

06/04/2007G

Mortgage lenders are also subject to requirements relating to responsible lending (see MCOB 11).

21/03/2016R

A second charge lender may only charge interest on charges applied to a customer for breach of a second charge regulated mortgage contract if the interest is simple interest.